Editorial: Start-ups - Fisker vs. Ford

2013-03-15 15:15:59

Henrik Fisker's abrupt departure last week from the Anaheim company he started up in 2007 bodes ill not just for Fisker Automotive, which manufacturers plug-in hybrid electric vehicles, but the entire EV industry.

Fisker debuted to much fanfare its very first car, the Karma, at the 2008 North American International Auto Show. The company promised to deliver the luxury sports sedan in 2009 but didn't make good until 2011. With a price tag topping $100,000, Fisker produced only 2,500 Karmas before suspending production.

We do not condemn Fisker for its failure to bring the Karma to market when promised. We are reminded that Henry Ford's very first venture – Detroit Automobile Co. – went belly up because of "customer complaints of high prices and low quality."

But there is one big difference between Henry Ford and Henrik Fisker: Mr. Ford's start-up auto company received no handout from the government while Mr. Fisker's start-up received a $528.7 million subsidy, courtesy of U.S. taxpayers.

Most Americans look askance at government bailouts of floundering companies, like the $21 billion in federal emergency loans pocketed in 2008 by General Motors and Chrysler. We imagine they would be no less sanguine about the more than half-billon dollar government "bail-in" gifted to Fisker in 2009.

After squandering nearly $200 million of the taxpayers' money, while failing to meet the production goals to which it agreed as a condition of accepting its public subsidy, the government in 2011 froze the remaining $330 million or so it originally bestowed upon Fisker.

Now, two years later, the electric car company is floundering. Not only has it suspended production of the Karma, it also is doubtful that the Fisker Surf will role off assembly lines in 2013, as promised. And the man for whom Fisker Automotive was named has bailed on the company.

While Fisker finds itself in extremis, other EV manufacturers are facing troubles of their own. None more so than Tesla Motors, based in Palo Alto and helmed by Elon Musk, whose other ventures include PayPal and SpaceX.

Musk had a recent run-in with the New York Times after an unflattering review of the Tesla Model S. A Times reporter set out on a drive between Washington, D.C., and Connecticut that ended, unhappily, with the stalled out EV being loaded onto a flat-bed truck.

Musk wrote a lengthy response, saying it was the reporter's fault for keeping the heat on while driving the Model S after being forewarned that doing so would drain the battery.

That illustrates why the EV industry has not grown nearly as fast as clean tech experts have predicted; why investments in Fisker and Karma have not panned out for the federal government.

EVs have promise. But they still are not a viable alternative to the 100 percent gasoline-powered vehicles that Henry Ford first put in garages throughout America, and that remain today the preference of most motorists.

Not when the sticker price for an EV is considerably higher than the price for a conventional car. Not when the average driving range for an EV is less than 100 miles before it needs recharging (which takes about eight hours). And not when a motorist can't turn on the heater in an EV when temperatures outside the car are nearly freezing.